Booths is on a roll. As well as enjoying a reputation as a pleasurable supermarket to shop in, it’s also expanding at a rate of knots, opening a new store last December and another four by September. And it’s just appointed a new CEO in Chris Dee, the first non-family member to take the helm since it first threw open the doors in 1847.
All change, then. But with rivals slamming the brakes on the space race, is this the right time for Booths to be forging ahead? And although Booths has enjoyed the trend for polarised shopping, reporting full-year pre-tax profits up 6.9% to £3.95m in the year to 29 March, the lines that defined the polarised trend have blurred as the discounters have increasingly targeted upmarket customers by knocking out cheap Wagyu and fine wine. Even Waitrose has started to suffer. So is Dee worried by the discounters and their ballooning range of cheap posh nosh?
“Have you tasted it?” he laughs, by way of reply. “Our quality is absolutely spot on. And quality is far more important than being the cheapest. What the discounters are doing in those areas is unsustainable for them. I’m not dismissing the whole thing. I think they’ve done a good job on certain items - they excel on the price of ambient. But customers believe in Booths to give them the quality. And we offer a very high quality of fruit and vegetables, meat, chilled and prepared.”
He won’t be playing the discounters at their own game, either. Booths tried a value range in 2010, called Everyday. It flopped. “It came out when Waitrose Essential did but now we’re getting rid of it,” he says. “It didn’t work. It didn’t sell. I think it shows how people feel about Booths and the role it plays in their lives.”
Name: Chris Dee
Place of birth: York
Marital status: Married with five-year-old twins
Potted CV: 20 years at Booths, before which I ran my own chain of wine shops
Best career decision: Joining Booths
Worst career decision: The worst product I got listed was a strawberry and cream liquor from Fragolina. It didn’t sell and the cream turned into cheese in the bottle
Career highlight: The recent promotion has been a great privilege
Career lowlight: How my own chain of wine shops ended. I sold them but reluctantly, and I was really devastated
Business mantra: Act fast, fail fast and fix fast
Business idol: Allan Leighton and Martin Sorrell
Hobbies: Cooking. I visit Michelin-starred restaurants to learn, such as L’Enclume in the Lake District and I’ll be visiting Corrigans in Mayfair soon. You learn about pressure, speed and accuracy in the kitchen and I take my leadership skills from there, rather than, say, from sport
Favourite meal: Italian, but something simple like risotto or a slow-cooked beef polenta
Currently reading: David Lodge - Nice Work
Favourite film: The Godfather II
Favourite music: Furniture
Booths has unquestionably played a major role in Dee’s life. He started as a 28-year-old wine buyer in 1995, after “reluctantly” selling up his off-licence chain to Oddbins. Dee then spent time in marketing and IT before becoming COO in 2012. And 20 years on Dee has proved to be a vital part of the company, forging “very strong” supplier relations and ties with northern processors. He was also behind Booths’ National Trust beef scheme and pioneered the retailer’s Fair Milk deal, which pays dairy farmers the highest farmgate prices.
And so, in February, in the absence of a family member to take the reins from Edwin Booth, the supermarket created a new position of chief executive and handed Dee the mantle. “A great privilege,” says Dee.
However, that uninterrupted succession since 1847 inevitably raises the question of whether Dee is simply acting as a custodian until another family member comes along. And it’s not something he hasn’t considered himself. “Let’s face it, our customers want Mr Booth, they don’t want Mr Dee,” he admits. “And I would hope in the future that a next generation of the family is able to take on the leadership.”
He’s safe for the time being, though. Other than Edwin Booth, chairman since 1997 and the man Dee reports to, Simon Booth, the supply chain director, and Graham Booth, the property director, will both vacate their day-to-day responsibilities within the year (although they will continue to sit on the family board).
Graham’s son Henry is next in line, but he only joined the business as a graduate in 2012. He’s spent two years as a buyer and will become a store manager later this year. So he may well be the heir apparent, but until that day dawns - and it remains some way off - Booths needs Dee to do more than just keep things ticking over.
Demonstrating that Booths is not immune to the pressures of the market, Christmas results were underwhelming, with 0.6% year on year growth in the six weeks to 3 January and like-for-likes down 0.8%. “I’m always disappointed if we’re not top,” Dee says of the seasonal sales period. “We were in line with Tesco, ahead of Morrisons, M&S, Sainsbury’s and Asda in terms of growth. And it’s only Waitrose that beat us, so in that sense I’m OK with it. We can always do better.”
And Dee plans to. Although he claims his appointment heralds no major changes at Booths (“sorry if that’s boring”), the reality is that he’s been involved in a “massive amount of change over 20 years” and, if anything, he will only pause for a well-earned breather once the fifth new store (replacing an existing store in Ansdell) opens in September.
“They all bunched up together and it was operationally challenging to get it done,” Dee admits. “Next year we’ll have no new stores. We’ve got some plots of land in Lancashire and Cumbria to develop, but not until 2017.” And when it does commence its next round of expansion it won’t be heading South. Edwin Booth refused to rule it out last October, but Dee is positive it won’t happen for decades, if at all. “It’s the economics of it,” Dee explains. “We’ve got a distribution centre in Preston. In order to build another DC, we’d need a whole raft of new stores to justify its existence. The chances of us doing that in the next five years are very low. Even the next 10 years would still be difficult.”
Besides, he adds, the question of moving South is just “everyone’s way of saying ‘Surely you’d rather be in the Home Counties or Somerset?’ Well, no, actually. To a certain extent we have to stick with what we’ve got. There are opportunities to expand within the North still, the South of Scotland, the North of Wales, but again this wouldn’t be in the immediate future.”
Online expansion, however, is a different proposition. Last Christmas Booths trialled online delivery of seasonal hampers across the UK. “It was relatively easy to make it work,” says Dee. “We used couriers, so we were just picking and packing into insulated boxes.”
It sounds simple, but of course it wasn’t. The service generated “more demand than expected”, resulting in some late deliveries. Dee also ended up “deploying a whole raft of our central office team to do packing of orders, when it started to fray.”
Undaunted, Dee will bring it back next year. Long term, he plans to launch the service all year round, as well as introduce wine delivery. Click & collect for both will also be introduced later this year.
As for in store, Dee wants to ramp up own label, saying “only a third of our sales are own label at present and I want that to become half. That will take a huge amount of effort. Right now own label makes up just under a third of our total SKU count.”
“Let’s face it, our customers want Mr Booth, not Mr Dee. I would hope in the future that a next generation of the family is able to take on the leadership”
It will also be running a firm rule over pricing in the wake of the price war. “We have to compete [with our supermarket rivals] every day,” he says. “We’re still competitive with our price match scheme matching rivals on brands, and we’re about to launch new pricing on our staple items. Deflation has really kicked in, and we’ve not necessarily kept up as fast as we could have done. We’re now making that adjustment on those everyday lines. It’s a very hard piece of work. We can’t sit on suppliers becoming more profitable at our expense, in the same way suppliers couldn’t the other way round.”
At the same time, Dee insists this doesn’t mean Booths is chasing the pack. “Competing doesn’t mean having to grow into all the towns they are in,” he says. “And I don’t spend my time looking over my shoulder at what they’re all doing, either. It’s just important that we never forget those competitors are there.”